I find it funny that they are suing for a reward of $$$ and not BTCs. hehe...full faith and credit

This statement does not make any sense. It is impossible for Coinlab to sue for bitcoins.

Serious question: why?

IANAL, but I think he's wrong, Coinlab could sue for BTC. Realistically they wouldn't, particularly if the contract referred to damages in $.

The one scenario where I could see a court rejecting a BTC claim is if the court(s) determined that trading BTC was somehow illegal. Courts won't enforce contracts or agreements that cause people to violate the law. For example, you can't take your drug-dealer to court if you give him money, he shorts you drugs, and you want the courts to force him to give you the right amount of drugs.

I find it funny that they are suing for a reward of $$$ and not BTCs. hehe...full faith and credit

This statement does not make any sense. It is impossible for Coinlab to sue for bitcoins.

Serious question: why?

I don't want to speak for Curudan, but one issue would be that all of the damages that they sustained were in US dollars, and so whatever evidence they presented would use US dollar figures. And if you tried to convert dollars to bitcoins, you run into a situation where the volatility of bitcoins really matters: would you use the dollar-to-bitcoin conversion at the time the loss was incurred (it's probably a series of losses incurred over time, actually), at the time the suit was filed, or at the time judgment was rendered?

I think that I am very comfortable with the pre-1964 silver dimes, quarters, and halves that I have stored away. While silver certainly does, and will fluctuate, at least I can get to them when the internet brokers are down.

Maybe, if Mt. Gox loses, they can pay in bit coins? That being said, it does show the confidence or lack thereof of the bit coin system considering that they want dollars and not bit coins.

I don't think there's ever been any question that the US dollar is, at least currently, a much more reliable currency than BTC. At the very least, its got hundreds of years of solid history to back it up. Even though it does face the prospect of government meddling, we haven't seen anything too egregious as of yet. The majority of Fed manipulation has so far been directed at improving stability.

Maybe, if Mt. Gox loses, they can pay in bit coins? That being said, it does show the confidence or lack thereof of the bit coin system considering that they want dollars and not bit coins.

Them not suing in bathroom tiles doesn't really show their lack of confidence in the future of hygiene either.

This is about an exchange between US Dollars and Bitcoins, not about the publication of the magazine "the death of the US Dollar", so suing in the currency that any other lawsuit would use as well, seems logican and natural.

The fact of the matter is, this chain of events are necessary in the process of stabilizing bitcoin as a reliable 'currency' IF the company can hop through the hurdles. After all, they are dicing with capitalism.

The Japanese firm needs to understand the rest of the world do not operate on the same set of code of ethics/corporate culture.

Bitcoin was never intended to be a replacement for the dollar and I would argue that any transaction that would require escrow show not be using Bitcoin. The lack of a trusted 3rd party such as Paypal or Visa is its strength as it is supposed to make transactions cheaper. Maybe Bitcoin's time in the sun has ended, but I firmly believe this or a better crypto currency will rise from the turmoil. It is too good of an idea to die.

I find it funny that they are suing for a reward of $$$ and not BTCs. hehe...full faith and credit

This statement does not make any sense. It is impossible for Coinlab to sue for bitcoins.

Serious question: why?

US dollars are backed by full faith and credit of the United States government, the most powerful country on Earth (as of now). It has been the default reserve currency since the end of World War II. The judiciary is one of the three branches of said government. Bitcoins are an attempt at producing an anonymous currency and it's being treated like a commodity due to its deflationary nature. I guess you could try and sue in BTC but... why!? On top of all the work your lawyers will be billing you for to prove that you're owed $75 million USD, now they get to explain to the court why you want BTC... and what Bitcoins are. That might not go over well at all, so he's being prudent and taking the currency of, you know, the country the suit is filed in. They're being practical.

CoinLab sued after Mt. Gox allegedly failed to hand off its American operations.

I wasn't sure if CoinLab was sued or if CoinLab was the one doing the suing. Granted, the interpretation of CoinLab being sued requires the assumption that the sentence is written in the passive voice. "CoinLab sues..." seems less ambiguous to me, but then again, I might be out of my mind.

Bitcoin was never intended to be a replacement for the dollar and I would argue that any transaction that would require escrow show not be using Bitcoin. The lack of a trusted 3rd party such as Paypal or Visa is its strength as it is supposed to make transactions cheaper. Maybe Bitcoin's time in the sun has ended, but I firmly believe this or a better crypto currency will rise from the turmoil. It is too good of an idea to die.

If it was intended to be currency, it will always be tied to other forms of currency, and as an alternative. But because people will always need to anchor it to something with actual utility (the dollar), it will never stabilize as its own form of currency (i.e. one barrel of oil = 1 bitcoin).

Multiple crytpocurrencies have sprung up to try to improve on it (feathercoin, litecoin), but they all have the same problems - the inherent anonymous and computer-work generation method means that you'll have an early-adopter class of those who control all the currency, while trying to convince the rest of the world it has value, and the anonymous aspect of the currency means that theft and hacking has a high reward/risk ratio.

Cryptocurrencies are inherently flawed, and will never rise from the turmoil. It's only a vehicle for speculation and the types of business that benefit from anonymous transaction, which tend to be illegal.

Bitcoin was never intended to be a replacement for the dollar and I would argue that any transaction that would require escrow show not be using Bitcoin. The lack of a trusted 3rd party such as Paypal or Visa is its strength as it is supposed to make transactions cheaper. Maybe Bitcoin's time in the sun has ended, but I firmly believe this or a better crypto currency will rise from the turmoil. It is too good of an idea to die.

Bitcoin absolutely requires trusted third-parties in the form of the miners who verify the transactions. The only reason it seems cheaper than PayPal now is that the processing is subsidized by mining revenues; once the cost per block overruns the reward, fewer of those third parties will verify transactions without a fee, which slows things down. If Bitcoin remains a volatile currency, this will be unacceptable to someone who doesn't want to get screwed between the time the payment starts and its verification. This reduced liquidity is a function of how fast the transaction can occur, so transaction fees will increase to ensure that the value transferred remains constant between two parties. But inflation can't occur because the money supply has a hard limit. That means more volatility and speculation.

I think the designers assumed that the Triffin dilemma doesn't apply without national distinctions. But the barrier between Bitcoin and national currencies is effectively a national barrier, so it does. You can't have people using a fixed inflexible monetary supply as both a long-term store of value to hedge against local fluctuations and as a vehicle for day-to-day transactions without somebody losing out. And that will be the death of Bitcoin.

I find it funny that they are suing for a reward of $$$ and not BTCs. hehe...full faith and credit

This statement does not make any sense. It is impossible for Coinlab to sue for bitcoins.

But you can sure specify contract damages in whatever currency or asset you like.

Due to the nature of Bitcoin's value fluctuations whenever something bad happens to any exchange, it would be very stupid to ask for it after a successful lawsuit hits the biggest exchange. Think of it like asking for stock in a company after success in a major lawsuit against them: it is entirely reasonable if you have enough cash to cover the costs of backing out of the deal and expect the defendant to recover and make more money. But if what you need is the hard cash, it'd be very, very stupid considering what happens to stock prices when a company loses a major lawsuit.

the inherent anonymous and computer-work generation method means that you'll have an early-adopter class of those who control all the currency, while trying to convince the rest of the world it has value

But one could argue that this is the case for all currency. The difference here is that the those who control this currency are not the usual suspects.

I would assume that the established financial institutions have a vested interest in either ensuring Bitcoin's demise or supplant it with an alternative they control. And I think that will ultimately be the reason why Bitcoin can't succeed.

the inherent anonymous and computer-work generation method means that you'll have an early-adopter class of those who control all the currency, while trying to convince the rest of the world it has value

But one could argue that this is the case for all currency. The difference here is that the those who control this currency are not the usual suspects.

No, it's not the case. Currencies are usually controlled by governments, not early adopters. It's not the same and they have quite different interests. That why there is an FDIC for accounts in US banks, but nothing similar for BC.

Quote:

I would assume that the established financial institutions have a vested interest in either ensuring Bitcoin's demise or supplant it with an alternative they control. And I think that will ultimately be the reason why Bitcoin can't succeed.

If BC use became widespread popular, established financial institutions would just find a way to make money from it. Bitcoin accounts, bitcoin debit cards, etc.

the inherent anonymous and computer-work generation method means that you'll have an early-adopter class of those who control all the currency, while trying to convince the rest of the world it has value

But one could argue that this is the case for all currency. The difference here is that the those who control this currency are not the usual suspects.

I would assume that the established financial institutions have a vested interest in either ensuring Bitcoin's demise or supplant it with an alternative they control. And I think that will ultimately be the reason why Bitcoin can't succeed.

The difference being that most currencies lose value if you don't invest them when the economy is functioning (see Japan's Lost Decade for why this is important). Bitcoin is designed to gain value, which means investing a bitcoin in anything other than more bitcoin is a losing proposition a lot of the time.

This is why retirement accounts and the like are more than just bank vaults where the money sits forever. People who want to maintain their wealth long-term have to put that money to some use, however disconnected it may be from whatever they themselves are doing. So you can generally assume that if someone maintains their wealth in US dollars, they must be doing something to help the overall economy.. By contrast, someone with a large Bitcoin balance could have mined back when it was just getting started and then sat there until they want to cash out. They didn't help anyone else. By extension, why should anyone else help them?

You hear that? That is the sound of Bitcoin's value plummeting even further...[/shot again]

In all serious though, I really hope Bitcoin manages to stay relevant. I don't own any Bitcoins myself, but the concept of having a crypto-currency (or hell, multiple crypto-currencies) which don't have to go through the scumbags at Paypal is a brilliant idea.

Side-note: Is it possible for somebody to exchange litecoins for say bitcoins before exchanging them for regular currency? I mean, what better way to hide your tracks than through using two different types of crypto-currencies when making a transaction?

How does Mt.Gox work and what if there's a run on Mt.Gox where everybody tries to pull money out of their "wallets"?

Does Mt.Gox have the reserves to fulfill all the withdraws?

It seems a little shady to me when Bitcoin miners are able to create Bitcoins out of thin air without injecting actual cash or anything of intrinsic value like gold into the Mt.Gox bank.

To me, I feel it's impossible for Mt.Gox to have the cash reserves to fulfill a huge amount of withdraws because of Bitcoin's meteoric rise in value against the US dollar. Surely, Mt.Gox's cash reserves didn't rise when the value of Bitcoins was going up against the dollar so what's keeping this bubble from bursting?

How does Mt.Gox work and what if there's a run on Mt.Gox where everybody tries to pull money out of their "wallets"?

Does Mt.Gox have the reserves to fulfill all the withdraws?

It seems a little shady to me when Bitcoin miners are able to create Bitcoins out of thin air without injecting actual cash or anything of intrinsic value like gold into the Mt.Gox bank.

To me, I feel it's impossible for Mt.Gox to have the cash reserves to fulfill a huge amount of withdraws because of Bitcoin's meteoric rise in value against the US dollar. Surely, Mt.Gox's cash reserves didn't rise when the value of Bitcoins was going up against the dollar so what's keeping this bubble from bursting?

You are describing a bank. Take money in, loan money out.

I think Mt Gox is an exchange. More like a flea market. MtGox is not a seller or a buyer, but the place buyers and sellers meet. No one takes money from MtGox. They just give MtGox a some change for each transaction.

I think Mt Gox is an exchange. More like a flea market. MtGox is not a seller or a buyer, but the place buyers and sellers meet. No one takes money from MtGox. They just give MtGox a some change for each transaction. "

I think Mt Gox is an exchange. More like a flea market. MtGox is not a seller or a buyer, but the place buyers and sellers meet. No one takes money from MtGox. They just give MtGox a some change for each transaction. "

Ok, it's starting to make sense to me now.

But then, how does the value of the Bitcoin fluctuate?

Works the same way as the stock market. Buyers state the price they are willing to buy at. Sellers state the price they are willing to sell at. When there's a match, a trade occurs, and that's the new price.

(In reality, buyers need to be willing to pay a little but more than the price sellers are willing to sell at, because the exchange takes a small cut.)